Valuation, Flagging Loan Growth Leads Wells Fargo to Downgrades Fifth Third Bancorp (FITB) to Market Perform

Wells Fargo downgraded Fifth Third Bancorp (NASDAQ: FITB) from Outperform to Market Perform with a price target of $16 to $17.

"We are downgrading FITB to Market Perform from Outperform for three reasons," said analyst Matthew H. Burnell.

1) "after outperforming its peer group since late May, we believe further upside potential for FITB shares is now in line with its large-cap regional bank (LCRB) peers."

2) "commercial loan growth trends, which have been robust through most of this year, are beginning to flag which could have a bigger effect on FITB than peers."

3) "FITB's 2012 CCAR exam and related capital actions have now been completed and announced, and appear to be largely incorporated into FITB's current share price."

Jefferies raised EPS estimates for 2012 (to $1.59, up $0.04) and reduced 2013 estimate by $0.01 to $1.64. The firm also introduced 2014 EPS estimate of $1.70.

For an analyst ratings summary and ratings history on Fifth Third Bancorp click here. For more ratings news on Fifth Third Bancorp click here.

Shares of Fifth Third Bancorp closed at $15.49 yesterday.

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